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On Oct. 25, I wondered about the wisdom of advocating for armed private guards as the appropriate first responders to burglar alarms.
Lone Star Security Regional Manager Bruce Boyer asked: Why have high-trained, highly-skilled police officers responding to burglary alarms when their time could be put to much better use?
Then offered this nugget:
The gun stays in the holster and only comes out when an officer faces deadly force. And that deadly force must have the ability to deliver it against an officer or customer, said Boyer.
"If the deadly force is across the street holding a knife, the gun stays in the holster," he said. "Our job is to investigate alarm calls. If there's criminal activity, we call the cops. We are not Rambo."
I was pithy at the time and said, "Well, not only are you not Rambo, you are also not a police officer. Let's hope deadly force is never used, but it's hard to rely on hope in that potential situation. ... What happens to a community when a private security company shoots a kid reaching for a cell phone? If a police officer does that, it's one thing. In this case he was placed on leave. I think it's a very different situation if it's a private security officer, where the city doesn't have recourse and the company is not accountable to the citizens."
Well, look at the response to this police shooting today. Would you want this photo to have your yard sign in the background? I'm thinking not.

While our December issue content is still a week or two away, you can check out our December source book, covering access control and biometrics, right now, right here. It's easy to put up, because all we do is post a pdf, which you can download or print out. Eventually, we'd like to get the product grid working online so that you can quickly search for which companies make which stuff, but that ain't happening yet.
Also, for those of you who are wondering why your company isn't listed, here's how we put together the product grid: First, we make up a survey that we host online. Second, whichever of our papers is running a particular source book first, in this case Security Director News, sends out an email to every company we know of in the marketplace, using both our editorial and sales databases of email addresses. Yes, people quit and we don't know and emails get sent to nowhere. Yes, our emails sometimes get caught by spam filters. These are things we can't help. It's impossible for us, with our current staffing, to either individually call every company or to send individual emails. Further, it is a fact that most of you manufacturers don't return our calls anyway, for reasons we're not clear about, unless you've already sent out a press release.
So, what you can do to make sure you're included in the future: 1. When we send you a survey, fill it out. 2. Add our email addresses to your "not spam" list. 3. When a product marketing person quits, make sure their email stays redirecting to a new person for at least a year (a pain, I know, but then again I'm still getting Chelsie Woods' emails, and she quit more than 16 months ago - I still get 10 emails a day from marketing people, often people I've spoken to recently, addressed: Hi Chelsea (because they apparently think Chelsie not only still works here, but also spells her name like the part of London)).
Dear integrator readers, if you have suggestions to make the source books better, leave them under the comment button below.

Just back late last night from Underwriters Laboratories in Chicago where I got to don a blue hard hat and red protective glasses Wednesday for a tour of ULÃ¢â‚¬â„¢s fire testing and research area, the facility is called Ã¢â‚¬Å“Building 11.Ã¢â‚¬Â
I was in Chicago for UL's Nov. 14-15 Smoke Characterization Seminar, (see the January issue of Security Systems News for more on the seminar) along with about 110 othersÃ¢â‚¬â€a handful of trade reporters, a bunch of fire service people, AHJs, engineers, manufacturers, academics and government types.
The U.L. facility is cool. (It cost $15 m. to build in 1996.) It has four testing areas including a huge room--like the size of a high school gymnasium--where they do massive burn tests. The ceiling in this room weighs 200 tons and can be lowered to six feet high and raised up to 48 feet high. That makes it easier to clean up the mess from one test and set up the next.
Tom Chapin, U.L.'s director of North American Fire and Security, said they can do major tests here every other day. TheyÃ¢â‚¬â„¢ve torched 15,000 gallons of jet fuel and 3,000 pounds of toilet paper rolls.
Ã¢â‚¬Å“You name it, weÃ¢â‚¬â„¢ve probably burned it in the last 10 years,Ã¢â‚¬Â Chapin said.
Last year, they built a one-story house (with a $1m. U.S.F.A. grant) and burned it and rebuilt it 21 times. Ã¢â‚¬Å“We burned it down, then built in again and added sprinklers and burned it down again.Ã¢â‚¬Â
The burns are done for testing reasons and for research. ClientsÃ¢â‚¬â€like manufacturers or insurance companiesÃ¢â‚¬â€come here so that an independent third-party can determine how certain products and/or system designs will perform in a fire. The burn projects cost between $10K and $250K, depending on the scale and scope of the project.
We got to see small-scale burn in one of the smaller testing areas, where they set up an enclosed room to look like an office, and started a fire in a trash can. A cross-section of the room was illuminated by a line of turquoise lights, and you could see the swirling smoke patterns-(reminded me of the psychodelic art at the Whitney Museum's "Summer of Love" exhibit in NYC last winter) which dissipated once ventilation was introduced.

The mainstream press is finally coming around to the fact that security companies exist. A couple weeks back, American Alarm got a glowing write up in the Boston Globe (check the archives), now Stanley Works gets a write-up from their home-town paper, the Hartford Courant.
The general tack is that, hey, Stanley does security now, as message that Brett Brontrager said at Securing New Ground he was still having a hard time putting forward, especially amongst the investment analyst community (which lead me to wonder how good these analysts can be if they can't realize that Stanley's doing $1.4 billion in security sales, which is fairly significant and seemingly worth paying attention to).
Anyhoo, this Courant article is lengthy and you might not make it through the whole thing, so let me draw your attention to a few graphs:
John F. Lundgren, the CEO of Stanley Works continues to monitor Lisle, Ill.-based HSM Electronic Protection Services, which Stanley purchased about nine months ago for $544 million in cash, making it among the two largest acquisitions in the company's history. The other was French industrial toolmaker Facom, which Stanley purchased Jan. 1, 2006, for $477.6 million.
HSM, which came with 50 offices, 175,000 customers and about $200 million in revenue, is seen as a key addition to Stanley's security segment because it provides security-alarm monitoring services, including video surveillance, to commercial customers.
The move brings Stanley into the monitoring service business and provides a recurring monthly revenue stream that Lundgren called a missing piece of the puzzle. The automatic doors unit, Stanley Access Technologies in Farmington, was the foundation for the security division, which produced and installed doors, locks and other security equipment.
"Our problem was we were taking on too many installations, period," said Lundgren, who said there isn't enough margin in that business.
HSM gave Stanley a far better cost-estimating model and the "mind-set that you don't do installation without service," said Lundgren, 56. HSM enables Stanley to sell lucrative service contracts along with future upgrades, Lundgren said.
"We love office buildings. They tend to pay their bills and not move," Lundgren said. "At HSM we like the business and service reputation and the management team and we like the business model. It's very service-driven and there is the recurring monthly revenue."
Today Stanley's security business is $1.4 billion; of that $800 million is mechanical doors, locks and hardware and $600 million is service and install, repairs, upgrades and monitoring, Lundgren said.
Does that ring any holy-crap-service-is-important bells? It's weird how everyone's finally jumping on board with this. Definitely makes Cliff Dice look smart in this op-ed from 2002 (yes, five years ago). Our editors were on top of remote video five years ago, too.
I could find 100 examples if I tried hard enough. When everyone agrees that recurring service revenue is way better than living installation to installation, and that just sort of makes a priori sense, who are these integrators who are in love of the installation revenue and low margins? I don't seem to mee them very often. Feel free to use the comment button to tell me what I'm missing here.

Two of the leaders in video monitoring have teamed up as of yesterday, when Westec Interactive bought Digital Witness. Both have made digital video into business continuity plays, mostly in the retail and restaurant verticals (or maybe restaurants are in the retail vertical?), and while they are happy to talk security, they're mostly an ROI sale.
Sound like anything I reported from Securing New Ground? Let this serve as a reminder that there are a number of companies out there working with digital surveillance that don't see themselves as part of the "security" industry, but aren't IT players either. They're simply security folks who don't make the rounds of all the secrurity conferences, necessarily.
Go look at their web sites (here and here) to get the full picture, but these companies are definitely on board with recurring service revenue. Just look at Digital Witness' subscription model. They're getting plenty for the install, I can assure you, but then they're tacking on service/monitoring revenue of, at least, $264 per month on their basic system for a chain restaurant. Are you getting $264 a month from the last quickie-mart install you did?
Our monitoring editor Leischen Stelter will have more on this deal for the newswire next week.

Attendees here largely woke up on time to catch Jeff Kessler's presentation at 8:45 a.m. He was bullish, to put it in Wall Street terms, saying, "This is about the most positive IÃ¢â‚¬â„¢ve been about the industry in a long time." His big message was that he sees the security industry finally moving from a situation where it's simply seen as a necessity, like an insurance policy, "to a situation where people need the applications that are being offered to them by the security companies."
However, his brand of positivism is geared toward the performance of public companies, remember. The market as a whole could do poorly while the public companies happen to do well because of irrational investor exuberance, for instance. Just because, to quote, "the stocks that we cover, the security index, has continued for five of the last six years to outpace the S&P 500 [and] we believe those will continue to outpace the S&P for the next five years," doesn't mean the bottom line of every integrator will show positive results.
Kessler generally seems to be of the belief that the large public companies, the Brink's and ADTs, will recognize the need to provide additional services, or already have, and will therefore get the margins they're looking for.
"There will remain a lot of people who are satisfied being just installers," he theorized, "but youÃ¢â‚¬â„¢ll have to get used to 25 percent gross margins." To get 40 percent gross margins, integrators are going to have to show customers an ROI case, or, rather, "help people save money. That is where the 40 percent margins are going to come in the integrator community. A material portion of these integrators are going to get it, the others will go out of business or be satisfied with the lower margins."
This again represents optimism on Kessler's part, as this time last year he was more of the gloom-and-doom mentality that security integrators will never be able to keep up with the IT resellers entering the market and taking advantage of networking ability. Now, he's changed his tune.
"I was part of the Steve Hunt camp, the Dan Dunkel camp up until the last six months," he said. "I thought there was extreme danger to almost every systems integrator, but I thnk that the IQ of intergators is going up now." Is this wishful thinking? A drinking of security conference Kool-Aid? Or reality? From my conversations with integrators, I generally agree with him, and was never as negative as Kessler was last year in terms of the impending IT takeover (remember that Kessler was just as bullish in terms of stock performance last year as he was this year - he just thought the security integrators were going to be left behind).

Securing New Ground, right here on Madison Avenue in the Roosevelt Hotel, just couldn't be more New York. If there's a higher Blackberry density at any other security conference I'd be shocked. And it somehow seems very appropriate that the Brooks Brothers store is right across the street.
Anyway, the mix of attendees is very heavy with manufacturers and financial types. I'm told this was once more of an alarm conference, where medium-sized companies came to look for buyers/buyees. Now, it's largely dominated by companies with new technology, along with a slew of high-ranking industry types from both manufacturers and integrators.
Some notes:
Ã¢â‚¬Â¢ Securitas Direct president and CEO Dick Seger was supposed to present but he was too busy being bought out. Oops. Sure does look good for Securing New Ground, though, as they've clearly identified industry players that the venture and capital world is interested in. Or maybe it doesn't look so good - if they know so much about the M&A market, shouldn't they have known their speaker would be busy today? (Sorry, that was a bad joke - I'm a little punchy down here in the Roosevelt bar, the only place I can get Internet, since the hook-up in my room is busted).
Ã¢â‚¬Â¢ Joe Nuccio, head of ASG, and Robert Farenhem, head of Devcon, presented together, and it was kind of amusing that Nuccio had just this past Friday bought Matrix and leap-frogged Devcon in annual revenues. Nuccio seemed postively elated. Farenhem looked and spoke like a guy who just escaped a year in the bush. I think Devcon's fortunes are looking up, but it's pretty clear the last year hasn't been a fun one.
Ã¢â‚¬Â¢ Brett Bontrager, head of Stanley's Convergent Security Solutions business, is a smart guy, without question, and has a good sense of humor, but has a way of talking where his voice rises at the end of every sentence like he's asking a question. I'm not sure why I find that notable, but I do.
Ã¢â‚¬Â¢ Julie Donohue, head of IBM's security business, predicted sales would jump from $.5 billion to $1.5 billion next year for IBM's security offerings (according to notes taken for me by Anixter's Severin Mulligan - I was busy ironing my suit). That seems ambitious until you realize they group IT and physical security, and they are spending money like drunkensailors.
Ã¢â‚¬Â¢ The lending professionals did not make me feel good about the economy. The basic message from Gretchen Gordon (CIT), Bill Polk (Capital Source), Ed Perry (Murphree Venture Partners), and Steve Sebastian (Nogales) was that capital is going to be harder to come by, you should be selling stuff off right now to increase liquidity, and lenders are going to expect stricter covenants going forward. "If you got a loan this spring," said Gordon, "good for you. You should keep it."
Ã¢â‚¬Â¢ Robert LaPenta, head of L-1, leads a charmed life. Not only did he start a $500 million company from scratch two years ago, but this year he bought a horse, War Pass, for $180,000 that proceeded to win a Breeder's Cup race, among others, and is now worth $20 million. "Now that's a good investment," he bellowed. I'd be shouting, too. You can find him in Kentucky this spring, I'm sure.

This seems slightly comical to me, but I guess it happens more often than you'd think. For the second time this year, Cross Match has decided not to offer its IPO right now:
PALM BEACH GARDENS, Fla.--(BUSINESS WIRE)--Nov. 13, 2007--Cross Match Technologies, Inc. announced today that it has postponed the initial public offering of common shares of the company due to volatile market conditions. The company believes that current market conditions are not favorable to maximize shareholder value and will continue to monitor the financial markets.
Click on the Cross Match label below to get all my posts on this.
I'm told, incidentally, that this is not uncommon for Hambrecht, who are apparently known for doing things on the cheap and pushing the envelope on last-minute timing. Also, talking about market volatility, E*Trade got itself a taste of that, and that couldn't have helped Cross Match's confidence any.
I'll keep an eye out for other Cross Match news, but they'll probably hold off for another few months at this point. Who knows, maybe L-1 will buy them or something.

ASG has been busy, busy, busy. It followed up the Oct. 26 recap (search for "ASG recapitalizes" in www.securitysystemsnews for details) with today's announcement of the acquistion of Matrix Security. ASG CEO Joe Nuccio, who was on his way to Securing New Ground (in Manhattan, Nov. 14-15), said the dealÃ¢â‚¬Å“brings some very, very talented employees into the ASG family; weÃ¢â‚¬â„¢re looking forward to growing and developing in those markets,Ã¢â‚¬Â he said.
Matrix has 33,000 accounts and $1 million in RMR, bringing ASGÃ¢â‚¬â„¢s total to $3.8 million in RMR and to roughly 108,000 customers. This buy moves ASG into new contiguous geographic areasÃ¢â‚¬â€the Carolinas and Northern New Jersey. Matrix has 12 branch offices, five in North Carolina, two in Virginia, two in New Jersey, and one office in the states of Maryland, Delaware and Pennsylvania.
Ã¢â‚¬Å“Our customers and employees have always been extremely important to us. I am really pleased that they are joining an elite company like ASG where there will be even greater opportunities for them in the future,Ã¢â‚¬Âsaid Ira Riklis, CEO of Matrix Security Group, in a statement.
Barnes Associates helped negotiate the deal. Financing was provided by Parthenon Capital.

IÃ¢â‚¬â„¢m back in Maine after attending HoneywellÃ¢â‚¬â„¢s First Alert Professionals' conference, Nov. 8-11, which drew a crowd of 850 to the Westin Kierland Resort in sunny Scottsdale, Arizona--about 100 execs from Honeywell Security, and representatives from 170 First Alert companies. The mix of companies, from the tiny to the huge, included those who've been in business for a whileÃ¢â‚¬â€Mel Mahlerof ADS, John Bourque of HB Alarm, Guardian ProtectionÃ¢â‚¬â„¢s Russ Cersosimo (and his enthusiastic group of at least 50), among many othersÃ¢â‚¬â€to newer companies. I had the chance to meet in person two of the younger security industry Ã¢â‚¬Å“movers and shakersÃ¢â‚¬Â featured in our Ã¢â‚¬Å“20 under 40Ã¢â‚¬Â special section this summerÃ¢â‚¬â€Shandon Harbor, president of SDA Security of San Diego; and Brett Bean, president of FE Moran of Champaign, Ill. Both Bean and Harbor were recognized during the event for their company's respective marketing efforts.
The theme of the event was a question: Ã¢â‚¬ËœAre you ready?Ã¢â‚¬â„¢
OK, ready for what? (one company wore t-shirts that said they were ready to stop receiving emails and postcards asking if they were ready) Ready, explained Honeywell Security and Custom Electronics' president Ron Rothman during the Nov. 9 opening session, for the communications revolution that's going on. He was referring to the "perfect storm" underway: the demise of the POTS line; the AMPs sunset; the new generation of (Gen X and Y) consumers; the availability of new technology; and, new Internet-era entrants into the security business (the Icontrols and Ucontrols, for example, in the world--who may be underestimating the complexity of the security market, according to Honeywell execs, but who may provide a distraction in the meantime.)
If youÃ¢â‚¬â„¢re ready, opportunities abound, Rothman and others said, but if youÃ¢â‚¬â„¢re not, and youÃ¢â‚¬â„¢re still doing things the same old way, you may be out of business or losing money soon. "This (change in technology) will happen once in a lifetime" he said, where dealers have an opportunity to future-proof their accounts by "using multi-path, end-to-end solutions." One of the new products/services that Honeywell is offering its dealers is called Total Connect which allows a customer, business or residential, to control an alarm system via email, web browser or cell phone.
During an educational session, called "Profitting From the Changing Landscape of Communications" HoneywellÃ¢â‚¬â„¢s vice president of AlarmNet Gordon Hope packed the room as he explained how to position security systems to the next generation of buyers, those who are looking for a bells and whistles and who don't ever worry (unlike previous generations) how reliable a product is. "The challenge we have," Hope said, "is to embrace the fact that the world is changing and to learn the strategies to succeed ... the value of your business will be based on how well you navigate this landmine of communication challenges."
John Jennings, chief executive officer of Safeguard Security had another standing-room-only conference room for his educational session called "100% GSM," where he talked about his rationale for installing GSM in all residential systems. Talking about the changing communications landscape, he asked the audience how many had an IT professsional on staff. "If you don't have one, start interviewing," he said.